Employer’s obligation to not defer/avoid payment of bonuses/raises

The government directives released during lockdown state that the employers must not deduct wages or not pay wages during the lockdown. However, any mention with regard to payment of bonuses or raises has not been made in the directive issued by the government.

While observing the statutory obligations of an employer under the Payment of Bonus Act, 1965. Payment of bonuses/raises to employees is at the discretion of the employer. However, the bonus must be paid to employees who are eligible under the Payment of Bonus Act, 1965. The Act regulates the payment of a bonus of employees whose wage is below Rs. 21,000/- per month. The bonus provisions under the Act, applies to establishments (including factories) that employ or employed, on any day during an accounting year, 20 or more employees. Every eligible employee is statutorily entitled to receive a statutory bonus ranging from 8.33% to 20% of the wage. Under the Act, bonus is to be paid to employees within a period of 8 months from the close of the accounting year.